Zynga (ZNGA) Tops Q2 EPS by 1c; Issues Light Q3 Outlook

Zynga (NASDAQ: ZNGA) reported Q2 EPS of ($0.01), $0.01 better than the analyst estimate of ($0.02). Revenue for the quarter came in at $199.9 million versus the consensus estimate of $156.84 million.

Financial Results

• Bookings of $174 million; above high end of the guidance range
• Adjusted EBITDA of $1 million; above the high end of the guidance range
• Mobile bookings now represent 66% of overall bookings at $115 million; up 30% year-over-year
• Advertising bookings, excluding licensing and developer payments, up 44% year-over-year
• $1.1 billion in cash and marketable securities
• Implemented $100 million cost reduction plan
• Positive free cash flow inclusive of investment in game development, marketing for new launches and infrastructure

Product Highlights

• Our Slots franchise – Wizard of Oz Slots and Hit It Rich! Slots – grew bookings 32% sequentially and recently secured a multiyear agreement with Warner Bros. Interactive Entertainment to license the Willy Wonka and the Chocolate Factory brand
• Empires & Allies launched worldwide with a 4.5 Apple App Store star rating and strong engagement with players averaging 5 play sessions daily totaling 38 minutes; at $0.26, Q2 Average Daily Bookings per Average DAU (ABPU) nearly 3 times the company's ABPU in Q2
• FarmVille: Harvest Swap launched worldwide with a 4.5 Apple App Store Star rating and strong player retention

Player Metrics

• Average DAUs – 21 million; down 23% year-over-year and down 15% sequentially
• Average MAUs – 83 million; down 32% year-over-year and down 18% sequentially
• Average Daily Bookings per Average DAUs (ABPU) - $0.091; up 29% year-over-year and up 21% sequentially
• Payer conversion (excluding NaturalMotion) – 1.6%; down 17% year-over-year and up 5% sequentially

Guidance:

Zynga sees Q3 2015 EPS of ($0.02)-($0.01), versus the consensus of $0.00. Zynga sees Q3 2015 revenue of $175-190 million, versus the consensus of $174.8 million.

For earnings history and earnings-related data on Zynga (ZNGA) click here.

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